Judges in two of Birmingham’s business courts have begun trialling Lord Justice Jackson’s concept of ‘costs management’.

The pilot in the Mercantile and Technology and Construction Courts aims to test whether judges can actively control costs throughout a case.

In his preliminary report on civil costs last month, Jackson (pictured) said costs management would be an adjunct to normal case management. In essence, this involves the court’s specific approval or sanction of costs at stated or approved levels at regular stages in the case.

It emphasises the need for firms to provide detailed estimates, but no more onerous than they should already be giving under the Solicitors Code of Conduct.

It is hoped that the voluntary pilot will provide sufficient information to allow Jackson to make a meaningful assessment of whether costs management can work.

A joint meeting of the two courts’ users committees saw strong support for the pilot’s rules among practitioners. In a letter to court users, Jackson stressed that small- and medium-sized enterprises (SMEs) ‘crave certainty’ about the costs of litigation, and that fear of indeterminate costs liability in the event of defeat sometimes deters SMEs from pursuing valid claims or defences.

Dean Parnell, a partner at Sydney Mitchell and chairman of Birmingham Law Society’s dispute resolution committee, said more court oversight should, in theory, help when costs get out of proportion and flag up potential problems earlier than usual. It would also give parties an idea of the likely costs liability if they lose, together with the court’s view on the level of such costs.

However, he said that some committee members fear costs will increase as more time will need to be devoted to dealing with the court on the issue.